No. of Recommendations: 3
If you had to raise cash fast without borrowing money, in what order would you cash the following:

- I-bonds paying 12% with a 3-month penalty (1 year away from no penalty)

Ummm. I don't believe these exist, but they sure sound good! According to my records, the highest fixed rate I Bonds ever issued were the 3.6% bonds of 05/00 - 10/00. Those would pay approximately 9.3% under the current inflation adjustment of 5.7%. But those are not 1 year away from no penalty (they are already in their no penalty phase). So I'm confused what you really own. 4 year old I Bonds issued 11/01 - 04/02 had a fixed rate of "only" 2.0%, and would be yielding about 7.7% now.

So I'm equally confused about these:
- I-bonds paying 9% with a 3-month penalty (18 months away from no penalty)
Could it be you calculated the 5-year period incorrectly? If not, they are either 2% or 1.6%, neither of which is paying close to 9%. Why don't you tell us what the fixed rate is, that would be more useful.

Without doing the calculations (perhaps someone else will), I'd sell the others in this order:

- 5.23% Bank CD, 4.5 years to go, with 3-month penalty
- 1-year-old EE-bonds with a 3-month penalty
- 4.88% Bank CDs, 4.25, 3.25, 2.25 years to go with 6-month penalty

- 12-year-old EE-bond, one year away from initial maturity (at which point it will jump 25% in value)

I'm assuming the 1-year-old EEs are the "old", variable kind, last issued one year ago this month.

Really, the 2 CDs and the year-old EEs are pretty similar. I ordered them that way just because of the penalty you'd pay, and favoring the EEs slightly since you can't buy them any more.

Clearly, it wouldn't make sense to sell the old EEs that are one year from increasing 25%. And, as far as the I Bonds go, well, the jury's still out on those, since it isn't clear what you really own.

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.